THE WANDERING TAX PRO
Up-to-the-minute advice, information, resources, and, on occasion, commentary on federal and New Jersey state income taxes, and the various New Jersey property tax rebate programs, and insights and observations on tax policy and professional tax practice, by 40-year veteran tax professional Robert D Flach.

Thursday, September 29, 2016

During
Monday night’s debate when Hillary Clinton suggested that Dangerous Donald paid
“0” in federal income taxes in past years Trump interrupted her to say that this
means he was smart.

A friend,
client, and fellow “Twiit” called for my help in responding to Trump’s
interruption in a tweet.

My response
to her was that there is “nothing wrong
with legally using {the} Tax Code to
reduce or eliminate taxes”.I did point
out that “Trump has shown his stupidity
in so many other ways”.

In a
subsequent tweet I said –

“If {Dangerous and Deplorable Donald} Trump legally used Tax Code to pay no tax {the}
problem is with the Code. But {there
is} no excuse for not releasing {his} tax returns. He is hiding something.”

While I
would never say that Trump was smart about anything – he was not wrong in using
whatever legal deductions, credits, and exclusions were available to him to
minimize or eliminate his tax liability.The courts have continually upheld the right of the American taxpayer to
use whatever legal means available to reduce or eliminate tax liability – and that
American taxpayers have absolutely no legal, moral, or ethical obligation to
pay any more federal income tax than they have to within the context of the US
Tax Code.

If Trump did indeed pay no federal
income tax in any years
(making him one of the “infamous 47%) through
the use of legal tax loopholes thenthe
blame lies with the mucking fess that is the US Tax Code, as written by the
idiots in Congress.This is truly one
of the very few, if not the only, instance where Trump is not wrong or at
fault.

It is obvious
that the current Tax Code needs to be totally shredded and rewritten from
scratch.The answer is not to raise tax
rates on those considered to be wealthy, but to remove preferences and
loopholes and the delivery of federal social welfare benefits.

Of course
there is nothing to indicate that Trump prepared a complete and honest tax
return, since he refuses to release his returns. He has certainly not been honest in the use of his Foundation, and has been fined for his indiscretions here by the IRS. There is no doubt that the information on the tax returns he refuses to release (and which he never will release) would somehow prove that he lies, as he does about everything else,
when bragging about his income, his wealth, and his charity.

Wednesday, September 28, 2016

“Narcissistic personality disorder is a
mental disorder in which people have an
inflated sense of their own importance, a deep need for admiration and a lack
of empathy for others. But behind this mask of ultra confidence lies a fragile self-esteem that's vulnerable to
the slightest criticism.

A narcissistic personality disorder
causes problems in many areas of life, such as relationships, work, school or
financial affairs. You may be generally unhappy and disappointed when you're
not given the special favors or admiration you believe you deserve. Others may
not enjoy being around you, and you may find your relationships unfulfilling.

Narcissistic personality disorder is
one of several types of personality disorders. Personality disorders are
conditions in which people have traits that
cause them to feel and behave in socially distressing ways, limiting their
ability to function in relationships and other areas of their life, such as
work or school.

If you have narcissistic personality
disorder, you may come across as
conceited, boastful or pretentious. You often monopolize conversations. You may belittle or look down on people you perceive as inferior. You may feel a sense of entitlement — and when you
don't receive special treatment, you may become impatient or angry. You may insist on having "the best" of everything — for instance,
the best car, athletic club or medical care.

At the same time, you have trouble
handling anything that may be perceived as criticism. You may have secret
feelings of insecurity, shame, vulnerability and humiliation. To feel better,
you may react with rage or contempt and
try to belittle the other person to make yourself appear superior. Or you
may feel depressed and moody because you fall short of perfection.

Many experts use the criteria in the
Diagnostic and Statistical Manual of Mental Disorders (DSM-5), published by the
American Psychiatric Association, to diagnose mental conditions. This manual is
also used by insurance companies to reimburse for treatment.

DSM-5 criteria for narcissistic
personality disorder include these features:

•Having an exaggerated sense of self-importance

•Expecting to be
recognized as superior even without achievements that warrant it

•Exaggerating your
achievements and talents

•Being preoccupied
with fantasies about success, power, brilliance, beauty or the perfect mate

•Believing that you are superior and
can only be understood by or associate with equally special people

•Requiring constant
admiration

•Having a sense of entitlement

•Expecting special favors and
unquestioning compliance with your expectations

•Taking advantage of
others to get what you want

•Having an inability
or unwillingness to recognize the needs and feelings of others

•Being envious of others and believing others envy you

•Behaving in an arrogant or haughty manner

Although some features of
narcissistic personality disorder may seem like having confidence, it's not the
same. Narcissistic personality disorder
crosses the border of healthy confidence into thinking so highly of yourself
that you put yourself on a pedestal and value yourself more than you value
others.”

Does this
sound like any Presidential candidate you know?Duh!

Dangerous and deplorable Donald
Trump is unfit to be President because of this mental disorder!!!

Tuesday, September 27, 2016

While on my
recent bus trip to Niagara Falls I overheard a conversation between two fellow
travelers that included the statement “you know that 47% of Americans are unemployed”.

This is not true.
The current unemployment rate is only about 5%.

What the two were talking about, I believe, is the infamous “47%” of
Americans who either pay no federal income tax or “make a profit” from filing a
tax return that was made famous by Mitt Romney in the 2012 Presidential
election.

These people are not unemployed.Many do work and actually have
enough income to generate an income tax liability – but the liability is
reduced to “0” or these filers receive a refund in excess of the amount withheld (therefore “making a profit” by
filing a return) through the use of tax credits, some refundable.The biggest refundable tax credit is the
Earned Income Credit, and you must have “earned income” – i.e. W-2 wages or net
earnings from self-employment – in order to qualify for this credit.

The reason
for the “47%” – actually now, I believe, about 44% - is the erroneous practice
by the idiots of Congress of distributing federal social welfare and other
benefit programs via the US Tax Code.If
these benefits were distributed more appropriately – via direct payment from
the budget of the applicable department – the beneficiaries that are included
in the infamous 47% would be paying federal income tax with the filing of their
1040s (or 1040As), and receiving federal benefits such as welfare and college
financial aid directly from the government.

As I have
said many times before the one and only purpose of the federal income tax is to
raise the money necessary to run the government – and not to distribute
government benefits or “redistribute” income. As I have said in past posts -

“I am not
saying that the government shouldn’t provide financial assistance to the
working poor and college students, provide encouragements for purchasing health
insurance, making energy-saving purchases and improvements and other ‘worthy’
actions.What I am saying is that such
assistance and encouragements should not be distributed via the Form 1040.

The
benefits provided by the Earned Income Tax Credit and the refundable Child Tax
Credit should be distributed via existing federal welfare programs for Aid to
Families with Dependent Children. The benefits provided by the education tax
credits and deduction for tuition and fees should be distributed via existing
federal programs for providing direct student financial aid. The benefits
provided by the Premium Tax Credit, the energy credits, and other such personal
and business credits should be distributed via direct discount payments to the
appropriate vendors or direct rebate programs, similar to the successful Cash
for Clunkers program of a few years ago, funded by the budget of the
appropriate Cabinet departments.

Distributing
the benefits in this manner is much better than the current method for many
reasons:

1. It would
be easier for the government to verify that the recipient of the subsidy,
discount or rebate actually qualified for the money, greatly reducing fraud.
And tax preparers, and the IRS, would no longer need to take on the added
responsibility of having to verify that a person qualifies for government
benefits.

2. The
qualifying individuals would get the money at the “point of purchase,” when it
is really needed, and not have to go “out of pocket” up front and wait to be
reimbursed when they file their tax return.

3. We would
be able to calculate the true income tax burden of individuals. Many of the
current “47 percent” would still be receiving government benefits, but it would
not be done through the income tax system, so they would actually be paying
federal income tax.

4. We could
measure the true cost of education, housing, health, energy and welfare
programs in the federal budget because benefit payments would be properly
allocated to the appropriate departments."

I do
believe that there should be a true “minimum tax” – not the “alternative”
minimum tax we now have thanks to the laziness of Congress.Every American citizen aged 19 through 64 who
is not a full-time student should pay a minimum tax of, let’s say, $100 in
federal income tax each year!

The bottom
line - the US Tax Code must be shredded and totally rewritten from scratch!

the only
publication I am aware of that deals exclusively with tax planning and
preparation advice, information, and resources for the NJ-1040.

I was on a bus trip to Niagara Falls for
most of last week, and did not keep up with the tax BUZZ (I did not bring my
lap top with me).So this installment is
a bit brief – but contains important information nonetheless.

* Don’t remember
if I mentioned this in an earlier BUZZ installment – but here is news from the
NATP weekly email update newsletter -

“The IRS announced special relief intended to
support leave-based donation programs to aid victims who have suffered from the
extraordinary destruction caused by last month’s severe storms and flooding in
Louisiana.

Under these programs, employees may forgo their
vacation, sick or personal leave in exchange for cash payments the employer
makes, before January 1, 2018, to charitable organizations providing relief for
the victims of this disaster.

Under this special relief, the donated leave will
not be included in the income or wages of the employees. Employers can deduct
the cash payments as business expenses.

In my opinion, the first thing you should
know is that if you are contacted by a private debt collector – write to the agency and tell them (or if
they call just tell them) that you refuse to deal with them, and will only deal
directly with the IRS.Tell them to
return any and all information relating to you and your tax situation to the
IRS.If you write send a copy of the
letter to the IRS.

THE FINAL WORD

A rational, intelligent, and serious voter
certainly has the right to question the competence, fitness, and
appropriateness of Hillary Clinton for President and, based on past and present
actions and statements, choose not to vote for her.

But Dangerous and Deplorable Donald Trump
has by his past and present actions and statements proven beyond any doubt that he is NOT competent or fit or appropriate
to be elected President of the United States.There is no good reason why anyone should
vote for Donald Trump.

You do not have to vote for Hillary Clinton
– you just have to NOT vote for Donald Trump!

Libertarian Party candidate Gary Johnson is
a rational, intelligent, and appropriate alternative for real Republicans and
conservatives.It is important to put
conscience and country over Party!

Wednesday, September 21, 2016

With all
the garbage and nonsense of the current Presidential campaign I actually forgot
to acknowledge and celebrate a milestone anniversary this past July.

I published
the first post of THE WANDERING TAX PRO on Sunday, July 22, 2001.So this mast July I celebrated the blog’s 15th
Anniversary!

I began
TWTP after attending a workshop on blogging at the 2001 National Association of Tax
Professionals annual conference held at the Hilton Riverside in New Orleans.

Here is the
very first TWTP post –

“WELCOME TO THE NEW WEBLOG OF ROBERT D FLACH,
THE WANDERING TAX PRO!

+++ The ECONOMIC GROWTH AND TAX
RELIEF RECONCILIATION ACT OF 2001, signed into law by President Bush on June 7,
2001, has made Section 529 state college savings plans (named for the section
of the Internal Revenue Code) an even better way to save for your child’s
education.

Earnings on money invested in
Section 529 Plans grow tax-free.Beginning in 2002, withdrawals from state-sponsored plans will be
tax-free is the money is used to pay qualifying college expenses.

+++ I recently returned from the
annual conference of the NATIONAL ASSOCIATION OF TAX PROFESSIONALS, held at the
Hilton Riverside in New Orleans, where the keynote speaker for the opening
session was IRS Commissioner Charles Rossotti.

This was the first time I travelled
without having a paper airline ticket in advance.I had no problem at check-in.

As I was walking down Bourbon Street
heading for dinner at Tony Moran’s PASTA & VINO, I passed a nude bar where
the hostess was offering passers-by the opportunity to “wash the girl of your
choice”.Good clean fun, “Nawlins”
style!

While in the Crescent City I saw “CHERRIES
JUBILEE”, a delightful comedy written by four local women, at the intimate and
very company SOUTHERN REP theatre on the third level of the Shops At Canal
Street upscale mall.The show had the funniest
and most innovative way to dress the set between scenes.”

Tuesday, September 20, 2016

Dangerous and deplorable Donald
Trump has done everything that would disqualify a normal and legitimate
candidate for office or would derail a normal and legitimate campaign.And he has done nothing that one would expect
a normal and legitimate candidate to do.

Every day he continues to spew
outrageous lies and nonsense, which is repeatedly proven to be lies and
nonsense via legitimate fact-checking.

Yet, like
the Energizer bunny, he just keeps going on, and the race continues to appear
to be close.

What does
this arrogant, pompous, self-absorbed buffoon have to do before he is totally
rejected by the Party and the people?

While many
respected Republican leaders have publicly denounced and opposed Trump, the
intelligent and rational response to his lies and nonsense, the Party itself
continues to, while I expect reluctantly, support his candidacy.

There is
nothing in his business or personal life, or in what he has said or done as a
candidate, that would suggest he is the least bit “Presidential”.It is the opposite that is true.Everything he has said and done, before and
during the campaign, proves that he is totally unfit to be President.

I am not a
genius, and I am not a doctor.But it is
as obvious as the nose on your face to me that Donald Trump is mentally
unstable, everything he says and does fueled by easily diagnosable acute
Narcissistic Personality Disorder.And
this is nothing new.I have been
pointing out his obvious excessive narcissism for over a decade.

Robert
Heinlein, the "dean of science fiction writers", has warned us to “Never
underestimate the power of human stupidity”.This Presidential campaign has
certainly demonstrated the power of human stupidity.

It is
inconceivable to believe that any rational and intelligent person would vote
for Trump.The only explanation for the
fact that he continues to poll at 40+ is the sad and disturbing fact that a
large percentage of the “great unwashed masses” are just plain stupid.

There are
Americans who cannot support Hillary Clinton, for political and personal
reasons, and cannot in good conscience vote for her.They have a right to believe that way.However there is no excuse for any real
Republican or conservative or any other person who opposes Clinton to vote for
Trump when there is an intelligent and rational alternative in the candidacy of
Johnson and Weld of the Libertarian Party, two former popular and respected
Republican governors, or Jill Stein of the Green Party, a credible more liberal
candidate.

While many
oppose Hillary, a Clinton Presidency would certainly not be the disaster, for
America and the world, a Trump Presidency would be.For these voters it really does come down to
the lesser of two evils.And if a
Clinton Presidency is the inevitable outcome of this election the Republican
Party is totally to blame for nominating such a heinous candidate.

My only
hope for the future of America and the world is that when it really counts,
when Americans are actually in the voting booth, there will be enough
intelligent and rational citizens who realize that they cannot in good
conscience vote for this dangerous, deplorable, and unstable reality tv clown.

“While
the sharing economy has proven to be controversial and there have been buyers
and sellers who have had some very bad experiences, it has become an integral
part of our economic landscape and will probably continue to grow. The Internal
Revenue Service has recognized this and has made it known that they want to be
part of the sharing as well.”

Chris explains when and how you must report
income from “sharing”.

The post includes a fact that was
unfamiliar to me, but something I always wondered about –

“This
exemption {taxpayers who rent out their home for less than 15 days in a
year do not have to report the income – rdf} came about thanks to a Congressional representative from Georgia whose
constituents collected a lot of extra money renting rooms in their homes to
spectators of a major pro golf tournament every year.”

I expect that the Congressional
representative from Georgia was one of those who was renting out his home to
spectators.

“Federal
tax receipts for the first 11 months of fiscal year 2016 totaled $2.909
trillion, according to the Congressional Budget Office (CBO). The CBO estimates
that the government took in $26 billion – or about 1% – more than they did
during the same period last year, marking a record high.”

* And now some words from our sponsor – me:

·Click
here to download the September 2016 issue of ROBERT D FLACH’S THE 1040 LETTER

“In
all, the couple released 10 years’ worth of their tax records, going back to
the 2006 tax year. Over the decade, they earned a total of almost $1.6 million,
paid total federal taxes of $142,343 and donated $119,500 to charity.”

Of course Dangerous Donald continues to refuse
to release his tax returns.At this
point who gives a damn?Nothing that
Trump, or Pence, does between now and Election Day could possibly make any
intelligent and rational person even consider that “the Donald” would make a
good, or even acceptable, President!

BTW – congratulations to Paul for being
included in ACCOUNTING TODAY’s list of the Top 100 Most Influential People in
Accounting.

And I do believe that Paul has truly
“jumped the shark”.Enough already with
the daily update on the “IRS Scandal”.

THE FINAL WORD

Presidential elections – any election –
should be about issues and not about “personality”.

Unfortunately, when one candidate’s
“personality” and temperament is to so disruptive and deplorable that it
overshadows any actual policy positions, and in itself, coupled with the
candidate’s obvious mental instability, makes that candidate unfit to be
President, as is the case with the current Presidential election, “personality”
must become the primary issue of the campaign.

It is much “more better” to have a
President whose personality and temperament is appropriate for a government
leader and Commander-in-Chief but with whom you disagree on the issues, than to
have one with policy positions that you may find more acceptable, but whose
"personality", behavior, and instability will prove a clear and
present danger to the country if elected.

And if that candidate does not in reality
have any real political or personal beliefs or convictions, and merely spouts
whatever he thinks his audience wants to hear solely to bring himself attention
and adoration, the choice is truly a clear one.

TTFN

New Jersey
residents – do you want to learn how to pay the absolute least amount of NJ
Gross Income Tax possible –

Wednesday, September 14, 2016

Barbra
Streisand, who I recently learned has had at least one #1 album in each decade
since the 1960s (and whose Broadway debut at age 19 I saw – I CAN GET IT FOR
YOU WHOLESALE - which also starred her then to be husband Elliot Gould), hit
the nail on the head at a fund-raiser for Hillary with a spot on parody of the
Stephen Sondheim classic “Send in the Clowns” about reality tv clown, and
unfortunately the Republican Presidential candidate, Dangerous Donald Trump,
who turned the 2016 President election into a 3-ring circus.

SADLY I PARTICIPATED- BUT STILL ENDED UP WITH A TRUE INFERIOR IN THE WHITE HOUSE

DONALD T RUMP HAS NOT DONE A SINGLE THING THAT IS "APPROPRIATE" OR "ACCEPTABLE" FOR A CANDIDATE OR A PRESIDENT SINCE THROWING HIS HAT INTO THE RING.EVERY SINGLE DAY TRUMP PROVIDES MORE PROOF THAT HE IS AN IGNORANT, SELF-ABSORBED, UNFIT, MENTALLY UNSTABLE IDIOT, AND A DEPLORABLE AND DESPICABLE HUMAN BEING.TRUMP MUST BE REMOVED FROM OFFICE FOR MENTAL INCOMPETENCE ASAP!

Donald T Rump has not done a single thing that anyone with intelligence would consider “appropriate” or “acceptable” for a President since deciding to run for office.

Every single day Trump provides more proof that he is an ignorant, self-absorbed, unfit, mentally unstable idiot, and a deplorable and despicable human being, who must be removed from office ASAP.

VERY IMPORTANT -

(1) Before contacting me with questions about how a blog post relates to your specific situation, please be aware that I do not give free tax advice to non-clients by e-mail, comment response, or phone. So don't waste your time and mine.

(2) I am winding down my tax practice, and I will not, under any circumstances, accept any new clients. Period. I am actually trying to "thin the herd".